30% of UK adults more financially vulnerable as a result of pandemic

Thirty per cent of the UK, equivalent to 15.9 million people, are now feeling more financially vulnerable than they did in March 2020, according to new research from Royal London.

The mutual insurer suggested the pandemic has caused a dramatic rise in the UK’s financial vulnerability.

Of those feeling more vulnerable, one third (33%) attributed this to a reduced income while almost one in five (19%) had a lack of savings to fall back on in the pandemic. Other reasons included taking on more debt (13%), as well as not being able to afford living costs (11%).

Royal London, which surveyed 2,000 nationally representative UK adults for the research, stated that building financial resilience lessens the impact of income uncertainty and provides a cushion to cope financially in unforeseen circumstances, of which the pandemic is not the only example.

When looking to the future and being able to respond financially to changes in life circumstances, however, the findings indicated that just one in six (16%) people feel “very financially resilient”, with men (20%) more likely to say this than women (12%).

To help improve financial resilience in the UK, Royal London has launched a new programme, Changemakers, and will commit £1.5m over three years to support social enterprises that have improved resilience and protected against life shocks such as illness, divorce or change in income.

Royal London consumer finance specialist, Sarah Pennells, commented: “We know that the pandemic has affected millions of people’s financial resilience and that’s why investing in these inspiring Changemakers is so important.

“Each social enterprise has either direct lived experience, or experience by association, of the problem they’re trying to solve and this comes with the passion to make a difference. We believe that these social enterprises can create real change and innovation is at the heart of it. We are delighted to support people who are looking at new ways of improving financial resilience.”

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